bebe stores, inc. (NASDAQ:BEBE) today announced unaudited financial
results for the fiscal first quarter ended October 5, 2013.
For the first quarter of fiscal 2014:
Net sales were $114.1 million, a decrease of 2.6% from $117.1 million
reported for the first quarter a year ago. Comparable store sales for
the quarter ended October 5, 2013 decreased 2.8% compared to a decrease
of 8.7% in the comparable period of the prior year and 7.1% in the
fourth quarter of fiscal 2013. The sequential improvement in sales was
driven by slight improvement in both traffic and conversion.
Gross margin decreased to 35.6% compared to 36.1% in the first quarter
of fiscal 2013. The decrease in gross margin was primarily due to the
increase in markdowns to clear through legacy products.
SG&A expenses were $50.1 million, or 43.8% of net sales, compared to
$46.2 million, or 39.5% of net sales, for the same period in the prior
year. The dollar increase in SG&A expenses was primarily attributable to
the earlier timing of marketing events and internal sales conference
expenses.
Net loss for the first quarter of fiscal 2014 was $9.2 million, or $0.12
per share, on 79.1 million shares outstanding compared to net loss of
$2.6 million, or $0.03 per share, on 84.4 million shares outstanding for
the same period of the prior year. Note that the fiscal 2014 net loss
reflects the continuing impact of maintaining a valuation allowance
against deferred tax assets and thus our effective tax rate approximates
0%.
During the quarter ended October 5, 2013, the Company opened one outlet
store and closed six bebe stores and two 2b bebe stores.
Steve Birkhold, Chief Executive Officer, commented, “Fiscal first
quarter 2014 marks the beginning of our turnaround journey. We saw a
favorable response to our new merchandising strategy while we continued
to clear through legacy merchandise during the quarter. While the retail
environment remains difficult, we continue to focus on our turnaround
initiatives and remain confident that we are taking the right strategic
direction. Looking ahead, we will focus on executing our transitional
strategies as we move forward. I would like to thank our shareholders
for their support as we continue our work to transform the business and
focus on sustainable growth in the long-term.”
Balance sheet summary:
Cash and investments at October 5, 2013 were $164 million.
As of October 5, 2013, average finished goods inventory per square foot
decreased approximately 0.7% compared to the prior year.
Capital expenditures for the fiscal quarter were $3.4 million.
Second quarter fiscal 2014 guidance:
For the second quarter of fiscal 2014, the Company expects comparable
store sales to be in the negative mid-single digit range considering the
challenging and highly promotional retail environment. Gross margin is
expected to be lower than the comparable period of the prior year due to
higher markdowns on legacy inventory, higher promotional activity
relative to last year and the deleveraging of certain fixed costs. The
net loss per share is expected to be in the range of low to mid-teens
per share. The expected net loss per share range also reflects the
continuing impact of maintaining a valuation allowance against deferred
tax assets as discussed above and thus a close to 0% effective tax rate.
Finished goods inventory per square foot as of the end of fiscal second
quarter 2014 is anticipated to be flat to the prior year.
Total capital expenditures for the year are anticipated to be
approximately $25 million for new stores, remodels, store expansions,
information technology systems and office improvements.
For the remainder of fiscal year 2014, the Company plans to open one
bebe store and to close up to five bebe stores and three 2b bebe stores,
which will result in approximately a 5% decrease in total store square
footage from the end of fiscal year 2013. In addition, our international
licensees are anticipated to add up to 20 points-of-distribution for the
fiscal year, offset by closures of unproductive and immaterial
points-of-distribution, namely 32 shop-in-shops in Israel.
Webcast and Conference call information:
A live audio webcast of bebe stores, inc. first quarter fiscal 2014
earnings release call will be available today at https://event.webcasts.com/starthere.jsp?ei=1024677.
The call begins today at 1:30 P.M. (PT) / 4:30 P.M. (ET). The webcast
will be hosted by Steve Birkhold, Chief Executive Officer, and Liyuan
Woo, Chief Financial Officer.
The financial results and live webcast will be accessible through the
Investor Relations section of the Company’s website at www.bebe.com.
To access the call through a conference line, dial 1-866-893-0531. A
replay of the call will be available for approximately one week by
calling 1-855-859-2056 and entering in conference ID number 90546950. A
link to the audio replay will be available on our web site at www.bebe.com
following the conference call.
Forward-Looking Statements
Certain statements in this release are "forward-looking statements" made
pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements reflect
the Company's current expectations or beliefs concerning future events
and are subject to various risks and uncertainties that may cause actual
results to differ materially from those that we expected The statements
in this news release, other than the historical financial information,
contain forward-looking statements that involve risks and uncertainties
that could cause actual results to differ from anticipated results.
Wherever used, the words “expect,” “plan,” “anticipate,” “believe” and
similar expressions identify forward-looking statements. Any such
forward-looking statements are subject to risks and uncertainties and
the company's future results of operations could differ materially from
historical results or current expectations. Some of these risks include,
without limitation, miscalculation of the demand for our products,
effective management of our growth, decline in comparable store sales
performance, ongoing competitive pressures in the apparel industry,
changes in the level of consumer spending or preferences in apparel,
loss of key personnel, difficulties in manufacturing, disruption of
supply, adverse economic conditions, and/or other factors that may be
described in the Company's annual report on Form 10-K and/or other
filings with the Securities and Exchange Commission. Future economic and
industry trends that could potentially impact revenues and profitability
are difficult to predict. We undertake no obligation to publicly update
or revise any forward-looking statement. Financial schedules are
attached to this release.
About bebe stores, inc.:
bebe stores, inc. is a global specialty retailer, which designs,
develops and produces a distinctive line of contemporary women’s apparel
and accessories under the bebe, BEBE SPORT, bbsp and 2b bebe brand
names. bebe currently operates 233 stores, of which 182 are bebe stores,
including the on-line store bebe.com, and 51 are 2b bebe stores,
including the on-line store 2bstores.com. These stores are located in
the United States, U.S. Virgin Islands, Puerto Rico and Canada. bebe
also distributes and sells bebe branded product through its licensees in
approximately 26 countries.
|
bebe stores, inc.
|
SELECTED BALANCE SHEET DATA
|
(UNAUDITED)
|
(Dollars in thousands)
|
|
|
|
|
|
October 5,
|
|
September 29,
|
|
|
|
2013
|
|
2012
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
$
|
78,010
|
|
$
|
96,657
|
Available for sale securities
|
|
|
|
|
39,487
|
|
|
64,423
|
Inventories, net
|
|
|
|
|
38,381
|
|
|
41,494
|
Total current assets
|
|
|
|
|
177,770
|
|
|
236,912
|
Available for sale securities
|
|
|
|
|
46,927
|
|
|
61,323
|
Property and equipment, net
|
|
|
|
|
102,362
|
|
|
117,528
|
Total assets
|
|
|
|
|
332,805
|
|
|
445,152
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
$
|
45,997
|
|
$
|
44,772
|
Total liabilities
|
|
|
|
|
80,997
|
|
|
84,426
|
Total shareholders' equity
|
|
|
|
|
251,808
|
|
|
360,726
|
Total liabilities and shareholders' equity
|
|
|
|
|
332,805
|
|
|
445,152
|
|
|
bebe stores, inc.
|
STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
(Amounts in thousands except per share data and store statistics)
|
|
|
|
|
|
For the Quarter Ended (number of weeks)
|
|
|
|
October 5,
|
|
|
|
|
|
September 29,
|
|
|
|
|
|
|
|
2013 (13)
|
|
%
|
|
|
2012 (13)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
114,127
|
|
|
100.0
|
|
%
|
|
$
|
117,091
|
|
|
100.0
|
|
%
|
Cost of sales, including production and occupancy
|
|
|
|
73,507
|
|
|
64.4
|
|
|
|
|
74,816
|
|
|
63.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
40,620
|
|
|
35.6
|
|
|
|
|
42,275
|
|
|
36.1
|
|
|
Selling, general and administrative expenses
|
|
|
|
50,076
|
|
|
43.8
|
|
|
|
|
46,195
|
|
|
39.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
(9,456
|
)
|
|
(8.2
|
)
|
|
|
|
(3,920
|
)
|
|
(3.3
|
)
|
|
Interest and other income, net
|
|
|
|
158
|
|
|
0.1
|
|
|
|
|
233
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
(9,298
|
)
|
|
(8.1
|
)
|
|
|
|
(3,687
|
)
|
|
(3.1
|
)
|
|
Income tax benefit
|
|
|
|
(145
|
)
|
|
(0.1
|
)
|
|
|
|
(1,106
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(9,153
|
)
|
|
(8.0
|
)
|
%
|
|
$
|
(2,581
|
)
|
|
(2.2
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
|
79,053
|
|
|
|
|
|
|
|
84,378
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
79,053
|
|
|
|
|
|
|
|
84,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores open at beginning of period
|
|
|
|
242
|
|
|
|
|
|
|
|
252
|
|
|
|
|
|
Number of stores opened during period
|
|
|
|
1
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
Number of stores closed during period
|
|
|
|
8
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
Number of stores open at end of period
|
|
|
|
235
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores expanded/relocated during period
|
|
|
|
-
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total square footage at end of period (000's)
|
|
|
|
945
|
|
|
|
|
|
|
|
1,001
|
|
|
|
|
|
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Copyright Business Wire 2013